The British Columbia-based legal technology firm received a $5 billion valuation plus $350 million in debt to help close the deal.
Clio has closed a US$500 million Series G round and has committed another US$350 million to complete the landmark deal in a deal that began six months ago.
Burnaby, British Columbia-based LegalTech announced plans in July to buy its Spanish-American counterpart. vLex for $1 billion in cash and stock. The acquisition, which has now been completed, allows Clio to advance its artificial intelligence (AI) vision while fueling its growth internationally and among large law firms.
“Do we have aspirations of going public? Absolutely… I think we'll do it when it makes sense for us.”
Kurt Sigfsted,
Clio
In an interview with BetaKit, Clio CFO Kurt Sigfsted said the company needed to raise additional capital “efficiently and quickly” to finance the acquisition, and it was able to do this by turning to existing backers and the debt market.
He said a “significant” portion of the $850 million was used to finance the purchase of Clio vLex, but did not disclose the exact amount. The $1 billion price tag also included a “significant” but undisclosed amount of Clio stock.
All 350+ vLex employees are joining Clio, bringing the company's total headcount to 2,000.
Sigfsted called Clio's acquisition of vLex “a really big deal.”
“Essentially it brings the two pieces together so that we have what we've been talking about as a 'smart legal work platform' that effectively provides lawyers with a platform that… helps them not only run their business, but also act on [legal] the work they do every day,” Sigfsted said.
Clio sells software designed to help lawyers manage their law practices more efficiently by centralizing functions such as client intake, case and document management, and payments. The company is increasingly using artificial intelligence to ensure its platform can also help clients solve real-world legal problems.
CONNECTED: Clio to acquire Spanish-American company Legaltech vLex for $1 billion
The all-equity and all-prime capital of the Clio G Series is valued at US$5 billion after investment. That's a significant increase from the $3 billion that many of the same investors valued the company at in the summer of 2024, when Clio folded. $900 million in Series F funding (which “substantially” consisted of secondary). This further cements Clio's status as one of Canada's most valuable technology companies, placing it just behind companies such as Approve, Hopper, Wealth is simpleAnd 1Password.
Prior to this round, Clio's total funding was over $1.2 billion. The firm's $500 million Series G was led by New Enterprise Associates, with support from existing US backers TCV, Goldman Sachs Asset Management, Sixth Street Growth and JMI Equity, while its $350 million debt vehicle was jointly led by US-based Blackstone and Blue Owl Capital.
According to Sigfsted, this funding will not only help Clio bring the vLex deal to the finish line, but will also put some additional cash on Clio's balance sheet to fuel strategic investments in international growth, product expansion and further mergers and acquisitions (M&A).
Clio's annual recurring revenue recently surpassed $400 million after doubling since reaching $200 million in the summer of 2024. Today, Clio serves more than 400,000 lawyers. Sigfstead did not share updated profitability figures.
This revenue milestone is the same as 1Password. announced it achieved positive free cash flow last week, which CEO David Faugno told BetaKit gave it the “scale and profitability” to become a public company today.
The CFO did not give any timeline for when Clio might go public, emphasizing that the company is focused on building a “100-year business” and that it has secured the capital needed to continue executing its strategy now as a private business.
“Do we have an aspiration to go public? Absolutely… I think we'll do it when it makes sense for us,” Sigfsted said.
AI 'fundamental' to Clio's vision
Clio's latest round is one of the latest more than $100 million in Canadian technology funding from the Toronto-based FinTech. Wealth is simpleto other AI players such as Toronto Approve And Lighthouse. Others, some of which had large minor components, include cardiac device maker Burnaby. CardiumVancouver Clinic Management Platform JaneToronto Advertising Technology StackAdaptand a Toronto-based corporate VPN provider. Tail scales.
AI already disrupting the legal industry in a variety of ways, and investors seem to have caught on: Amid the AI boom, funding for legal tech companies has surged this year. Law360 found that legal tech funding grew 80 percent year-over-year in the first quarter.
Sigfsted called AI “fundamental” to Clio's vision for the future of legal technology. He said that belief was reinforced by the company's launch of Duo last year, the way it already uses AI in its core platform to help lawyers run their businesses, and the size of its investment in vLex.
CONNECTED: Clio acquires UK company ShareDo to begin serving large law firms and fuel global expansion
Clio's plan isn't about taking lawyers out of the equation, but about helping them do their jobs more efficiently and effectively, Sigfsted said. “This is really the foundation of an intelligent legal AI work platform,” he said.
In the legal field, the stakes associated with error are high: the CFO noted that incorrect answers or hallucinations can lead to dismissal or disbarment.
This, according to Sigfsted, makes legal data used for AI training and reference even more important. Enter vLex, which it says gives Clio access to “arguably the best legal databases and information resources in the world” due to its global nature.
“There are really three such data sets on the planet,” he said. “This is what we have, what Thomson Reuters has and what LexisNexis has. We think it will be increasingly difficult for many competitors to compete with this database.”
CONNECTED: Harvey will bring artificial intelligence legal platform to Canada with new office in Toronto
Sigfsted named Clio a leader in the legal practice management software industry. Among the technology companies serving large law firms, the CFO said he expects competition from larger, more established legal software players such as Toronto's Thomson Reuters and New York's LexisNexis, as well as fellow artificial intelligence upstarts like San Francisco's Harvey. extension to Clio's native territory and Swedish Legora.
Clio, which expects corporate legal clients to become a “significant” part of its business in the coming years, has made some progress in servicing them with the vLex deal. purchase British company ShareDo earlier this year, and recent launch divisions of your company.
Sigfsted said vLex's database gives it an edge over new competitors in the legal AI space, and said that while existing legal software providers have built their businesses on supporting legal research, they may have a harder time adapting to how lawyers will work in the future using AI.
“We feel like we have a really strong strategic position here compared to our competitors,” Sigfsted said.
As for what Clio's M&A strategy might look like in the future, Sigfsted said it's safe to expect the company to continue with “more of the same” with acquisitions aimed at accelerating the company's roadmap, but on a smaller scale given the size of the vLex deal and the work Clio still needs to do in the coming months to integrate the two businesses.
Image courtesy of Clio.
